As tensions in the Middle East rise with U.S. and Israeli airstrikes and the death of Iran's Supreme Leader Ayatollah Sayyid Ali Khamenei, the government launched an emergency review of the real economy. The government said it will use all available tools to minimize the economic shock.
The Ministry of Trade, Industry and Resources said it held the second real economy review meeting on the 1st at the Korea Trade Insurance Corporation (K-sure) in Jongno District, Seoul, chaired by Vice Minister Moon Shin-hak and attended by related ministries, affiliated agencies, and industry groups.
The meeting was a follow-up to the emergency review led the previous evening by Minister Kim Jung-kwan of the Ministry of Trade and Industry (MOTI). Related ministries including the Ministry of Foreign Affairs, the Ministry of Climate, Energy and Environment, the Ministry of Oceans and Fisheries, and the Financial Services Commission, as well as the Korea National Oil Corporation (KNOC), Korea Gas Corporation (KOGAS), the Korea Trade-Investment Promotion Agency (KOTRA), the Korea Energy Economics Institute (KEEI), and major business groups all took part.
With the possibility that the situation could lead to the closure of the Strait of Hormuz in mind, the government began close management of conditions. Currently, Korea holds several months' worth of strategic oil reserves and gas inventories above mandated levels, leaving it fully capable of responding to an immediate supply crunch.
However, if the situation drags on and the supply crunch worsens—such as when private crude inventories fall below a certain ratio—the Ministry of Trade and Industry (MOTI) plans to supply strategic oil stored at nine stockpiles nationwide, including Yeosu and Geoje, to the domestic market after holding its own situation assessment meeting.
In line with instructions from Minister Kim Jung-kwan, the Korea National Oil Corporation also launched an emergency review of measures in its contingency manual, including bringing in overseas production volumes, exercising priority purchase rights for joint stockpiles, and checking readiness to release strategic oil.
For maritime logistics, since the Red Sea crisis in 2023, major container carriers have already been rerouting via the Cape of Good Hope in Africa instead of using the Suez Canal, so the impact so far has been assessed as limited.
In addition, the Middle East accounted for 3% of Korea's exports last year, a small share. However, considering the potential spillover effects of higher oil prices and logistics costs on our exports if the situation persists, the government, together with related ministries and agencies including the Ministry of Oceans and Fisheries (MOF), KOTRA, and the Korea International Trade Association, decided to seamlessly push liquidity support for export corporations and logistics subsidies through export vouchers. If logistics bottlenecks intensify in earnest, it will also consider additional measures such as deploying temporary vessels.
On the supply chain front, for certain chemical products with high dependence on the Middle East—such as bromine and ethylene glycol for synthetic fibers—the plan is to minimize the impact by expanding domestic production and securing alternative supply sources.
According to the Ministry of Climate, Energy and Environment's review, there has been no direct impact on power supply and demand so far. However, Korea Electric Power Corporation and power generation public corporations will strengthen monitoring while maintaining a close communication system with the Ministry of Trade and Industry (MOTI) and the climate ministry in preparation for a possible oil price spike and disruptions to liquefied natural gas (LNG) imports.
Commercial attachés from major countries, including the United States, China, Japan, and the European Union (EU), also joined by video to share developments in their host countries, difficulties faced by local corporations, and potential risk factors.
On the day the situation broke out—the previous day—the Ministry of Trade and Industry (MOTI) activated an emergency response team led by Director General Yang Ki-uk of the Office of Industrial Resource Security, with participation from relevant departments and affiliated agencies. Through this, it plans to monitor the situation in real time and thoroughly manage it so that oil price fluctuations do not excessively pass through to consumer prices such as domestic gasoline and gas rates.